The Center for Audit Quality has funding available for academics who are researching ways to improve audit quality and auditor independence, skepticism and objectivity.
The CAQ has issued a request for proposals to fund independent academic research on auditing-related topics. The latest round of proposal requests focuses on a number of critical policy issues that have been priorities for the CAQ and the public company auditing profession in 2012, including Going Concern and Audit Quality Indicators.
“The nexus between academic research and professional practice has always been important to the CAQ’s mission of enhancing audit quality,” said CAQ executive director Cindy Fornelli in a statement. “It has never been more critical for research to have a profound impact on the future of auditing, audit quality and auditor independence, objectivity and skepticism. I believe further research on the topics the CAQ’s RFP highlights can have a significant real world impact on the profession’s work.”
Cindy Fornelli
The CAQ aims to provide opportunities for the academic community to work closely with the profession. In 2008, the CAQ established a Research Advisory Board, made up of representatives from academia and the profession. In the past four years, the RAB has awarded a number of grants for independent academic research projects on several topics of interest to the profession.
Among the research topics the CAQ is interested in funding are:
• Audit Quality Indicators: Key stakeholders have different views on how to assess audit quality. There is a large body of academic research, but no common definition or consensus on metrics. The CAQ is interested in research that seeks to define and measure audit quality from the perspectives of key stakeholders.
• Going Concern: The CAQ is interested in research that identifies issues with the current going concern model, such as the 12-month assessment period and consistency in determining substantial doubt, as well as research that provides perspectives on how users evaluate risks related to a company’s ability to continue as a going concern.
• Professional Skepticism: Professional skepticism is a key component of audit quality. There are various definitions of professional skepticism in the standards and the academic literature. What would enhance the application of skepticism in the field? What are effective ways to document the consideration of alternatives/evidence such that the audit documentation demonstrates skeptical thinking in the assessment of audit evidence?
• Professional Judgment: Specific areas of focus on how preparers and auditors apply professional judgment include the evaluation of the reasonableness of estimates of fair values, impairments, development stage intangibles, contingent liabilities; the auditability of accounting estimates; the effects of a principles-based versus a rules-based approach to accounting and auditing standards.
Other topics of interest to the profession include financial reporting fraud deterrence and detection, the impact of communication and information technologies on the audit and the value of the audit.
The number of projects selected for funding will depend on the quality of proposals received and the total dollar amount of funds requested. The CAQ plans to make available up to $200,000 to fund multiple projects during the submission period.
To be considered, proposals should be received by 8:00 p.m., Friday, March 1, 2012. Researchers should send an electronic copy of their proposals to researchproposals@thecaq.org. Questions regarding this RFP should be submitted to Margot Cella at the same email address.
Proposals will be reviewed by the CAQ’s Research Advisory Board. The grants will be announced on or about May 31, 2013. The RFP is available on the CAQ’s Web site at
http://www.thecaq.org/newsroom/pdfs/ProposalsforAcademicResearchDecember2012.pdf.
